Macroeconomic Forecast Ecuador

November 2006 | Macroeconomic Forecasts

BMI View: Data released by the Banco Central de Ecuador (BCE) shows that the economy performed reasonably well in Q206, with real GDP coming in at 4.8% y-o-y. Whilst this figure is lower than the 5.6% registered for Q106, it indicates that the Ecuadorean economy still has some steam in it. That said, we think that economic activity will slow on the back of lower oil prices and consumer thrift related to election jitters. As such, BMI forecasts that real GDP growth will come in at 4.2% by year-end. This is in line with the BCE's forecast, which projects a growth rate of 4.37% for 2006. Furthermore, we also expect growth to slow over the next year, falling to 3.5% in 2007. The main driver of slower growth will be the mining sector, particularly non oil-related products. However we also think that the industrial sector will slow somewhat next year.

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